Exxon Second Quarter Earnings Now Stand As Company Record

Exxon Second Quarter Earnings Now Stand As Company Record
ExxonMobil has announced an estimated second-quarter 2022 earnings of $17.9 Bn. A record quarter for the company.

U.S. oil supermajor ExxonMobil has announced an estimated second-quarter 2022 earnings of $17.9 billion. A record quarter for the company.

Second-quarter results included a favorable identified item of nearly $300 million associated with the sale of the Barnett Shale Upstream assets. Capital and exploration expenditures were $4.6 billion in the second quarter and $9.5 billion for the first half of 2022.

Exxon's results for the second quarter of 2022 beat its best quarter of 2008 when Brent crude oil prices peaked at $147 per barrel as well as its best-ever quarter reached in 2012 when the company earned $15.9 billion.

“Earnings and cash flow benefited from increased production, higher realizations, and tight cost control,” said Darren Woods, chairman and CEO. “Strong second-quarter results reflect our focus on the fundamentals and the investments we put in motion several years ago and sustained through the depths of the pandemic.”

“Key to our success is continued investment in our advantaged portfolio, including Guyana, the Permian, global LNG, and in our high-value performance products, along with efforts to reduce structural costs and improve efficiency. We're also helping meet increased demand by expanding our refining capacity by about 250,000 barrels per day in the first quarter of 2023 – representing the industry's largest single capacity addition in the U.S. since 2012. At the same time, we’re supporting the transition to a lower-emission future, growing our portfolio of opportunities in carbon capture and storage, biofuels, and hydrogen,” Woods added.

According to Exxon, second-quarter earnings of $17.9 billion compared with $5.5 billion in the first quarter of 2022. Excluding identified items, earnings of $17.6 billion increased $8.7 billion from the prior quarter, driven by a tight supply and demand balance for oil, natural gas, and refined products, which have increased both natural gas realizations and refining margins well above the 10-year range.

Cash increased by $7.8 billion in the second quarter, as strong cash flow from operating activities more than covered capital investments and shareholder distributions. Free cash flow in the quarter totaled $16.9 billion. Shareholder distributions were $7.6 billion for the quarter, including $3.7 billion of dividends.

The net-debt-to-capital ratio improved to 13 percent reflecting a period-end cash balance of $18.9 billion. The debt-to-capital ratio was 20 percent, at the low end of the company's target range.

Upstream earnings in the second quarter of 2022 were $11.4 billion compared to $4.5 billion in the first quarter. Excluding identified items, earnings were $11.1 billion, an increase of $3.3 billion from the previous quarter.

Oil-equivalent production in the second quarter was 3.7 million barrels per day. Liquid volumes increased by nearly 35,000 barrels per day and natural gas volumes grew by more than 150 million cubic feet per day.

Earnings excluding identified items increased by $7.9 billion relative to the second quarter of 2021. This improvement was primarily the result of a 71 percent increase in crude realizations and a 186 percent increase in natural gas realizations. Oil-equivalent production increased 5 percent, excluding entitlement effects, divestments, and government mandates. Liquid volumes rose nearly 100,000 barrels per day, while natural gas volumes increased by almost 315 million cubic feet per day.

Year-to-date earnings excluding identified items were $18.8 billion, an increase of $13.1 billion versus the first half of 2021 on higher crude and natural gas realizations.

The Permian continued to improve efficiency and grow volumes, with average production during the quarter of more than 550,000 oil-equivalent barrels per day. The company is expecting to achieve a 25 percent production increase this year versus full-year 2021 and to eliminate routine flaring in the Permian by year-end.

Asset sales and divestments resulting in more than $3 billion of proceeds were announced during the second quarter. The sale of the company's operated and non-operated Barnett Shale gas assets in Texas was completed in June, contributing nearly $300 million in earnings and more than $600 million in cash during the quarter. The other announced divestments, including XTO Energy Canada and the Romania Upstream affiliate, are anticipated to close later this year, subject to regulatory approvals.

To contact the author, email bojan.lepic@rigzone.com

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